‘There is no need and there’s no intention for us to take any further action,’ Mah Bow Tan, minister for national development

Singapore is not planning to take further steps to cool down the republic’s booming property market after it withdrew a scheme last month that allowed buyers to delay payments for property, the government said on Monday.

Residential property prices in Singapore have soared to their highest levels in a decade, fuelled by a supply crunch and a strong economy as well as liberal payment schemes that allow buyers to make a 10 to 20 per cent deposit and delay the bulk of payments until a project nears completion.

‘There is no need and there’s no intention for us to take any further action,’ Mah Bow Tan, minister for national development, told parliament.

‘The government will continue to closely monitor the property market to ensure that our prices are supported by economic fundamentals. The government will make sure that there is sufficient supply to meet the demand of private housing.’

The sharp rise in prices has left some government leaders worried this could threaten Singapore’s competitiveness with rival Hong Kong, where property prices are higher.

Inflation in the city hit a 12-year high of 2.9 per cent year-on-year in August and the government said on Monday that consumer prices could potentially surge up to 5 per cent in the first quarter of next year.

Singapore’s government said last month that it withdrew the deferred payment scheme for the sale of uncompleted private residential and commercial properties. The scheme was introduced in 1997 when the economy was in recession.

Up to 90 per cent of buyers in projects by Singapore property developers such as City Developments and Keppel Land opted for such payment schemes.

The government said the move would encourage greater financial prudence among investors by compelling them to seek sufficient funds or adequate bank loans before they commit to buying a property.

According to official data, Singapore private home prices rose 8.3 per cent between July and September, or more than 21 per cent since the start of the year. — REUTERS

Source : Business Times - 12 Nov 2007